September soybean meal futures (ZMU25) present a buying opportunity on more price strength.

See on the daily bar chart for September soybean meal futures that prices have been trading in a sideways and choppy fashion at lower levels for the past 2.5 months. Prices are hovering just above longer-term technical support levels, which suggests a “basing” process that puts in market bottoms and sets off price uptrends.  History shows that meal prices around the $300-per-ton level are a value-buying opportunity.

Fundamentally, this week’s modest thawing in the U.S.-China trade war, following upbeat comments from both sides after meeting in London earlier this week, is a positive development for a resumption of better Chinese demand for U.S. soybeans in the near future. Also, the official start of summer in the U.S. soon means generally hotter and drier growing conditions for much of the soybean crop. More years than not, the soybean market sees a weather-market rally in the summertime. Given no significant summertime weather-market rally in soybean futures last year, this year a weather-market rally is especially overdue.

A move in the September soybean meal futures prices above chart resistance at the May high of $305.70 would give the bulls fresh power and it would also become a buying opportunity. The upside price objective would be $330.00, or above. Technical support, for which to place a protective sell stop just below, is located at the May low of $296.50.

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 

Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.